Demographic research has been used by a variety of organizations to better understand and target certain groups of consumers. For example, using demographics, consumers are targeted based upon age, gender, lifestyle, geographic location and multicultural demographics to name a few. Companies using such marketing efforts often hire a third party (e.g., an advertising agency) to assist the organization in determining which consumers to target. The purpose of such efforts is to reach as many consumers as possible in a time-effective and cost-effective manner.
Typically, demographic-based marketing programs are designed to monitor consumer spending habits for the purpose of further advertising to these consumers. For example, if a certain age group is known to frequent consumer electronics stores, the demographic-based marketing program would use this information as a basis for which to conduct advertising (e.g., mailings) of products typically purchased with electronics such as cabling, extended warranties, and entertainment centers.
One such program involves the use of gift certificates in incentive and promotional programs. There are many different types of consumers and not every gift certificate is appropriate for every consumer. For example, not every consumer is interested in a new stereo. As such, it is important to know as much as possible about the potential recipients in order to provide them with proper incentives. Retailers use demographics to determine which gift certificates to provide to specific groups of consumers.
The above and other issues have presented challenges to implementing a marketing program that reaches beyond these more tangible and identified spending habits of individual consumers.